Lawmakers Wednesday approved a bill to nullify a clean-energy ballot measure that's barely gotten off the ground in Arizona by making the penalty for utilities violating such a rule as little as $100.
Republican Sen. Sonny Borrelli of Lake Havasu City introduced the "striker" amendment supported by fellow Republicans. Such amendments are a tactic used to introduce a new issue late in the session, often skipping part of the public-hearing process. It passed a committee vote 4-3 on party lines.
Critics contend the amended House Bill 2005 undermines not only the current Renewable Energy Standard, where state utility regulators at the Corporation Commission require utilities to get 15 percent of their power from renewable sources by 2025, but also a ballot initiative recently filed in Arizona aiming for 50 percent renewables.
Arizona Public Service Co.'s lobbyist said the intent was to thwart the ballot measure, not the existing renewable-energy standard, which he said the state's biggest utility is on track to meet.
"We proudly support this amendment and proudly worked with Rep. (Vince) Leach on drafting it," said Rod Ross, senior government affairs representative for APS.
The bill sets the penalty for utilities violating such a clean-energy standard as a civil fine between $100 and $5,000.
"It is important to protect the people of this state from an out-of-state initiative funded by a California billionaire that threatens to raise our electricity prices," Ross said.
Clean Energy for a Healthy Arizona filed paperwork with the Arizona Secretary of State's Office in hopes it can gather about 226,000 signatures and let voters decide if the state constitution should be amended to require utilities to get 50 percent of their power supply from renewables such as solar and wind by 2030, a significant jump from the existing standard.
One of the groups involved in the ballot measure is NextGen America, a political group that focuses on climate change. The group was founded by philanthropist Tom Steyer.
"It would instantaneously require utilities to begin negotiating long-term renewable-energy contracts," said Sen. John Kavanagh, R-Fountain Hills. "The price for those contracts would be astronomical."
Kavanagh said the lawmakers needed to act to protect low-income utility customers.
Tough questions for APS
Sen. Juan Mendez, D-Tempe, asked Ross pointed questions about why APS supports the bill.
"It looks like the voters are going to approve an initiative to increase the renewable energy standards," Mendez said. "Is your intent to violate the clean-energy standards we (voters) set?"
Ross said APS officials were confident the ballot measure would fail.
"But if it were to pass, it would have a catastrophic impact on our state economy and our ratepayers," Ross said.
Mendez shot back: "So your intent is to then break the law and pay the $100 fine?"
Ross said that if APS were unable to meet such a standard, it would collaborate with regulators on some form of settlement.
Critics say voters should decide
Mendez also questioned why it was better to kill such a measure in the Capitol rather than let the voters express their will at the ballot box.
Borrelli gave an explanation.
"This is why they (voters) elected us," he said. "They are too busy. I see this being better vetted here, where we are serving people and protecting the constitution."
Sen. Lupe Contreras, D-Cashion, said the bill undercuts voters.
"Saying our voters in our state may not understand or may not vote the right way on certain issues before them is rude, and I think that it is like a slap in the face to the great people of this great state that we sit here and fight for on a daily basis," Contreras said.
Mendez offered an amendment that would require utilities to report all political donations, a point of contention as APS has increasingly involved itself in the elections for the five Corporation Commissioners who set utility rates in the state.
That amendment failed.
What are the current renewable-energy rules?
Arizona Revised Statute 40-246 allows customers to petition the Corporation Commission if they believe a utility is violating a commission order. If at least 25 utility customers sign on to a complaint, it would automatically trigger legal proceedings. (Photo: Tom Tingle/The Republic)
In 2006, commissioners passed the Renewable Energy Standard and Tariff. It requires electric companies to get 15 percent of their power from renewables by 2025, and big companies such as APS are on track to do that.
The existing rule also allows utilities to charge a tariff to customers to pay a premium for renewable energy compared with traditional natural-gas and coal power plants.
Salt River Project, the second-largest utility in Arizona, does not have to follow Corporation Commission's standard because it is a political subdivision of the state and is run by an elected board of directors. It would not be affected by the ballot measure.
SRP seeks to get 20 percent of its energy supply from "sustainable" sources by 2020. SRP includes energy efficiency in its goal.
Utilities such as APS face a separate standard of 22 percent by 2020 for efficiency, which includes things such as subsidizing low-watt light bulbs and helping customers buy fewer energy-wasteful appliances.